Correlation Between Capital One and EON SE
Can any of the company-specific risk be diversified away by investing in both Capital One and EON SE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Capital One and EON SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital One Financial and EON SE, you can compare the effects of market volatilities on Capital One and EON SE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Capital One with a short position of EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital One and EON SE.
Diversification Opportunities for Capital One and EON SE
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capital and EON is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Capital One Financial and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE and Capital One is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Capital One Financial are associated (or correlated) with EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of Capital One i.e., Capital One and EON SE go up and down completely randomly.
Pair Corralation between Capital One and EON SE
Assuming the 90 days horizon Capital One Financial is expected to generate 0.95 times more return on investment than EON SE. However, Capital One Financial is 1.05 times less risky than EON SE. It trades about 0.11 of its potential returns per unit of risk. EON SE is currently generating about 0.01 per unit of risk. If you would invest 10,708 in Capital One Financial on September 4, 2024 and sell it today you would earn a total of 7,592 from holding Capital One Financial or generate 70.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Capital One Financial vs. EON SE
Performance |
| Timeline |
| Capital One Financial |
| EON SE |
Capital One and EON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital One and EON SE
The main advantage of trading using opposite Capital One and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital One position performs unexpectedly, EON SE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in EON SE will offset losses from the drop in EON SE's long position.| Capital One vs. VIRG NATL BANKSH | Capital One vs. National Bank Holdings | Capital One vs. BANKINTER ADR 2007 | Capital One vs. Reinsurance Group of |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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